Market Trends Report
Running Out of Time
The window of opportunity is closing for sellers to find success in 2017.
Last Call for 2017: Just weeks until the slowest season of the year starts for housing. The holidays are right around the corner.
The weekend before Thanksgiving is the last hurrah before market transitions from the Autumn Market to the Holiday / Winter Market. From there, real estate activity takes a back seat to all of the distractions of the holidays. Demand comes to a crawl, dropping about 25% from where we are today. The active inventory drops considerably, shedding about 25% as well. Fewer homeowners will opt to sell and many unsuccessful sellers will throw in the towel and pull their homes off the market, choosing to wait until the much more active Spring selling season.
There will be plenty of new escrows opened prior to transitioning into the season of yuletide greetings, but that window of opportunity will close fast.
Many Realtors assert that they are busy during the month of December. The Smith Group consistently has an uptick in numbers comparing December to November. This is due the a surge in new pending sales from now through Thanksgiving. Those pending sales close in December.
The number of new pending sales drops significantly in December. Demand drops dramatically from Mid-November until it bottoms with the start of the New Year. The market normally does not shake off the effects of the holidays until the third week of January. Typically, the inventory does not build until the beginning of March. With so few homes on the market today, the start of 2018 is expected to be rather anemic.
The Numbers – November 2017
The average list price for all of Orange County remained at $1.7 million. This number is high due to the mix of homes in the luxury ranges that sit on the market and do not move as quickly as the lower end.
For homes priced below $750,000, the market is HOT with an expected market time of just 43 days. This range represents 40% of the active inventory and 61% of demand.
For homes priced between $750,000 and $1 million, the expected market time is 55 days, a hot seller’s market (less than 60 days). This range represents 17% of the active inventory and 20% of demand.
For homes priced between $1 million to $1.25 million, the expected market time is 88 days, an extremely slight seller’s market with very slow appreciation.
For luxury homes priced between $1.25 million and $1.5 million, the expected market time increased from 101 days to 111. For homes priced between $1.5 million and $2 million, the expected market time decreased from 178 to 173 days. For luxury homes priced between $2 million and $4 million, the expected market time decreased from 280 days to 218 days. For luxury homes priced above $4 million, the expected market time increased from 316 to 326 days.
The luxury end, all homes above $1.25 million, accounts for 35% of the inventory and only 13% of demand.
The expected market time for all homes in Orange County decreased in the past couple of weeks from 67 days to 65 days, a tepid seller’s market (60 to 90 days). From here, we can expect the market time to slowly rise as housing makes its way through the final month of the Autumn Market.